Swedish Riksbank’s Eighth Interest Rate Cut Since May 2024 but the Last One for Some Time to Come

September 23, 2025

In Sweden where core CPI inflation of 3.2% exceeds the 2% target by the most in 19 months, the Riksbank Executive Board surprised analysts with a 25-basis point interest rate cut to 1.75% today. In justifying their decision, officials opined that “new information has given further reassurance regarding the assessment that the high inflation is transitory; growth has been weak for a long time, and the timing of the expected recovery has been gradually pushed forward. The turnaround on the labour market also appears to be taking longer than expected.” Anchoring inflation expectations, however, officials also signaled that the new 1.75% interest rate level, which is down from 4.0% maintained from September 2023 to May 2024, is unlikely to change again “for some time to come.”

Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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